Guest Post: Celebrate 1 Bitcoin = $10K with FEE

When FEE.org ran its first articles on Bitcoin, the price was $14. It was the curiosity of a tiny number of crypto-mavens. Today the price hit $10,000. It is the most lucrative investment on the planet earth, and perhaps the safest haven against government monetary depredations.

What is this about? The key is market-driven technology. Bitcoin is a new solution to the oldest human problems of securing property, documenting ownership rights, and facilitating trade.

FEE was founded in 1946 not to defend a forgotten faith. Its purpose was to be a voice for real progress in an ever-freer world. We’ve been that voice for 71 years.

An idea: if you have made money in the crypto markets, consider helping out the cause. Technology alone does not drive history; it needs to be embedded in a philosophy of freedom and the good life. We neglect the educational mission at our peril.

Thank you for supporting the great work of the Foundation for Economic Education! If you would like to make a special Bitcoin donation…

A chap called Kuppers recently explained the Bitcoin silliness in this way:

“Blockchain is the revolutionary part

What we will be left with is the one thing about Bitcoin that is truly revolutionary. And this is the backbone that makes the exchange of bitcoins between individuals possible without a central ledger that records who owns what bitcoins. It is called the Blockchain, and it is brilliant.

Today, most experts refer to the technology as a “distributed ledger”. A distributed ledger allows all those who trade in an asset class to agree on the ownership of the assets in near real-time – without a single ledger that is centrally maintained. It does this by allowing everyone to hold a copy of the ledger every time a transaction cycle is completed. By layering the ledgers, you create a “chain” that has perfect ownership records and perfect transaction history – one that everyone will automatically agree with the moment it is created.

Distributed ledger technology has the potential to strip billions of dollars from administration costs. For equity markets, it should allow for trade settlement to occur in near real-time. It seems odd that in today’s world we measure trading in fractions of seconds, but that settlement takes two days. We should be able to sell shares and walk to the nearest ATM to get our cash. Distributed ledger technology may help make this a reality.

This explains why several exchanges, including our own ASX, are looking at distributed ledger technology to replace ageing central depositories such as CHESS. I hope they do.

The backbone technology is real and its value to consumers is real. And therefore, it will survive. Bitcoin as a digital “currency”, won’t.”

This explains why several exchanges, including our own ASX, are looking at distributed ledger technology to replace ageing central depositories such as CHESS. I hope they do.

I hope so too, but that won’t be Bitcoin. Point is that CHESS is open book to any government entity wanting to check who is buying and selling what… so too any distributed ledger that replaces CHESS must also be open book (possibly not open to everyone, but open to the important people). The whole point about Bitcoin is a claim to protect individual privacy, which is the exact thing that governments hate about it.

I love the certainty expressed by techno-luddites like McCran (or that repulsive ABC smart arse, Kohler) about something they only recently found out about, and now clearly consider themselves experts already.
The original Bitcoin (I say original, because there now exist several ‘forks’ with similar names, but different features) is open source, which means that as long as a sufficiently large consensus of developers and ‘miners’ can be secured, the protocol, which admittedly lacks in several important areas compared to more recent cryptocoins, can be upgraded to incorporate pretty much any improvement.
That such consensus is possible was demonstrated only a few months ago when over 80% of the above mentioned interested parties agreed to implement the SegWit upgrade.
In a similar fashion, BTC can be made fully anonymous and further improve its transactions speeds – the currently possibly biggest deficiency.
And whether it, or something similar, will not continue as currency? – Maybe Terry needs to have a chat with some people in Venezuela or Argentina about that.

In a similar fashion, BTC can be made fully anonymous and further improve its transactions speeds – the currently possibly biggest deficiency.

No, it can’t be made fully anonymous. The pseudonymous system only holds while no entity has sufficient resources to map the network and connect each wallet with a real human. There are many tried and proven techniques available to governments to get people to reveal their secrets… the only question is how far they want to go with this.

Coinbase Inc. lost a bid to block an Internal Revenue Service investigation into whether some of the company’s customers haven’t reported their cryptocurrency gains.

U.S. Magistrate Judge Jacqueline Scott Corley in San Francisco ruled that the tax agency’s demand for information isn’t overly intrusive. The price of bitcoin has been soaring and crossed $10,000 Tuesday.

With just 800 to 900 taxpayers reporting bitcoin gains from 2013 through 2015 in a period when more than 14,000 Coinbase users have either bought, sold, sent or received at least $20,000 worth of bitcoin, “many Coinbase users may not be reporting their bitcoin gains,” she wrote. “The IRS has a legitimate interest in investigating these taxpayers.”

Its fun to watch my fellow libertarians tut tut about bitcoin here. I bought into Bitcoin a couple of years ago, not as an investment, but as a hedge against the risks of fiat currency. Since then it has also proven to be a good investment. Long may it remain so.

Monero?
I believe there are geeks out there already who are convinced that comparable level of anonymity could be introduced to the BTC protocol.
The details are way too technical for my level of IT knowledge, but nobody seems to doubt that XMR and ZEC (Zcash) are in fact anonymous. It follows that if this is one’s major objective, a cryptocurrency with such features is already available.

but bitcoin isn’t going to replace money, not when it costs $45 to perform a transaction.

Yes, this is becoming a problem and it the proposals as to exactly how to fix it are a contentious issue amongst the various stakeholders.
It may well turn out to be BTC’s downfall, but then again, it is apparently entirely fixable. So I would think that self-interest will eventually broker a consensus on how to move forward.

but bitcoin isn’t going to replace money, not when it costs $45 to perform a transaction.

I also read that a transaction can take hours to complete and the size of the ledger is huge, so for those on the NBN are going to be waiting days to download their ledger and confirm their transactions.

I was going to buy 2 grand worth back when it was 90 cents a coin. I’d be over $10,000,000 richer now but how to cash it in still remains a mystery?
And if I did how would I explain my sudden windfall to the tax man?

Because for me, the only thing I want out of a crypto currency is a means to get all the parasites out of my pocket!

You can buy and sell on a crypto exchange just like a traditional company share. I would assume the feds will know you have it, and expect the usual 25/50% skim on the capital gain, but at 1100% up in the last 12 months, its still a decent return

Isn’t he the uber-Keynesian ‘guru’ who recently opined that cash should be banned? Just so the ‘unconventional monetary policies’ of the central banksters could ‘work’? In other words, so they could confiscate people’s savings via NIRP and similar abominations without having to fear they may cause a bank run?
He’s one of the major reasons why Bitcoin and other cryptos are gaining in popularity!

I knew about bitcoin for years but never knew how fat of a golden goose it was.

That was, until I parked a mere $100 in to a Loaf Wallet, that is, a crypto wallet for Litecoin, the silver to the gold that is Bitcoin.

One month later, after realizing i left that diddly little amount in my Loaf Wallet, and checked on it, I was aghast. It had turned into $450!

So last friday, I sold my long forgotten Employee Issued Shares from my previous job and turned it all in to Bitcoin, and it’s now Monday, and the amount I invested has blown up more than half one weeks worth of pay from my Salary in just only four days!